Gov. Jesse Ventura stumped for his budget at a meeting of the state's largest business group, and got a more friendly reception than some other business interests have offered recently. The governor's plan has taken criticism from businesspeople, who say the benefits of reduced property taxes are dwarfed by higher costs from a broader sales tax.

LAST WEEK AN OFFICIAL FROM NORTHWEST AIRLINES told a legislative committee the effect of the governor's budget on his company would be draconian. But an audience of some 1,200 members of the Minnesota Chamber of Commerce and the Minnesota Association of Realtors gave the governor a standing ovation when he took the stage. Ventura complained about the criticism from five multinational corporations, delivered last week at a legislative hearing.

"For years they've complained about high income taxes and property taxes being out of line and that was the negative here in Minnesota. And now I come along and substantially cut them, and still executives from these big companies complain," Ventura said.

Business interests have praised the governors plan to reduce property taxes, but have howled over the provisions that would spread the sales tax to many more services, though at a lower rate of six percent.

The governor likened his plan to a knitted sweater, that would unravel if two major threads were pulled out, limited spending and the expanded sales tax.

"If you spend more than my recommended budget, the sweater will lose an arm. If you don't expand the sales tax to services, the sweater loses another arm, and then you have a vest," he said.

Chamber President David Olson says the governor's key priorities are aligned with the chamber's, including lowering property taxes and reducing the price of government.

"For years they've complained about high income taxes and property taxes being out of line and that was the negative here in Minnesota. And now I come along and substantially cut them, and still executives from these big companies complain."

- Gov.Ventura

"If you look at the two cornerstone features of his budget, reducing the price, and property tax reform, he's a friend of this organization," Olson said. "We've made it very clear that we've got some concerns with the sales-tax piece, and some other parts of the budget. You know, he uses a sweater example. You know what size is that sweater going to be. Maybe it won't be a vest, but maybe it will be a little smaller."

Olson says it would be possible to reform property taxes, without extending the sales tax, by scaling back other Ventura initiatives like income tax cuts.

While preventing the extension of the sales tax is not one of the chamber's official top-five priorities, it was front-and-center for some in attendance, especially Realtors, like Barry Kukowski from St. Cloud. "He's talking about reducing taxes, but then he's turning around and adding a new tax onto our service which is our commissions, and that's not really reducing a tax. That's just spreading it to us. I'm still paying taxes in other areas. Now you're just adding another area to that."

Kukowski says Realtors can't assume they can just pass the tax on to clients. But Revenue Commissioner Matt Smith says, overall, the permanent property-tax reductions the governor proposes will more than offset the broadening of the sales tax, both in real estate and in total.

Smith also says big corporations who complained about the governor's plan may have overestimated their costs from a broader sales tax.
In any case the governor says he has yet to hear an argument that will make him walk away from his budget.